Ocular Therapeutix plunges as eye treatment blurs the line in PhIII

Ocular CEO Amar Sawhney

Ocular Therapeutix ($OCUL) needed a clean sweep in its expansive Phase III program for a postoperative eye treatment in order to set itself up for a clear shot at an FDA approval. But it didn't get it.

OTX-DP is a hydrogel formulation designed to provide an extended-release dose of dexamethasone. It's intended to replace some eye drops now used to prevent inflammation and pain after cataract surgery. As the Bedford, MA-based biotech spelled out recently, it needed to hit both primary efficacy endpoints in the second of two late-stage trials to count it a success. The first Phase III was heralded as a win, but investigators noted today that while the biobetter performed better than a dummy version in reducing pain, it failed to distinguish itself from the placebo when measuring the "absence of inflammatory cells in the anterior chamber of the study eye on day 14."

The biotech's shares immediately plunged 28% on the news as the CEO tried to explain the misfire.

CEO Amar Sawhney blamed the failure on a high placebo response, but it's unclear right now just how persuasive that may be with regulators--or for that matter, payers, if the treatment gets to the market. At its best, any new therapy competing against cheap and long-established competitors would have to clearly distinguish itself in order to carve out significant market share. Ease of administration may sound like an improvement for patients, but as payers dig in--willing to trade off on things like more complex dosing in exchange for lower prices--that's becoming an increasingly hard sell in the U.S. 

But Ocular isn't giving up at this point.

"Following the favorable results from our first Phase III trial, we are disappointed that the second Phase III clinical results for resolution of inflammation did not have the same magnitude of differential as what OTX-DP achieved in the first trial," Sawhney said in a statement. "Although the efficacy results for the absence of inflammatory cells in the OTX-DP treatment group met our expectations, the placebo group response was significantly higher than expected. We have begun a thorough analysis of the data from the second Phase III trial to fully understand the difference in efficacy between these two trials that had essentially the same trial design and similar patient populations."

The biotech has one product on the market, ReSure Sealant, which is approved to close corneal incisions after cataract surgery.

- here's the release

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